I spend most of my time digging into Wall Street, hedge funds and private equity firms, looking for both the good and the bad. I also focus on the intersection of business and the law. I have worked at Forbes since 2000.

Moelis Investment Bank Files For IPO

Moelis & Co., the investment bank founded by Los Angeles dealmaker Ken Moelis, filed paperwork with the Securities & Exchange Commission to raise as much as $100 million in an initial public offering.

Moelis is a former top UBS investment banker who left the Swiss financial firm to found his own financial advisory firm in 2007. He has apparently built one of the larger independent outfits advising on mergers & acquisitions and other financial transactions. According to the SEC filing, Moelis & Co. generated revenues of $411.4 million in 2013 and its profits soared by 99% to $70.2 million.

Moelis’ firm has in the last year advised on some big deals, including the $23 billion sale of H.J. Heinz to Berkshire Hathaway and 3G Capital, and the $11 billion sale of NYSE Euronext to IntercontinentalExchange.

The IPO filing comes at a time when big investment banks like Goldman Sachs are increasingly seeing a slowdown in their key fixed income trading businesses. But at the same time, some smaller advisory firms like Lazard and Evercore Partners are seeing some success.

In its securities filings, Moelis & Co., clearly argues that independent advice is in high demand. In 2013, 80% of the top 10 announced M&A deals and 75% of the top 20 announced M&A deals included independent advisors, the IPO filing says. By comparison, in 2003 30% of both the top 10 and top 20 announced M&A deals included independent advisors.

Indeed, one man operating without an institution behind him, Paul J. Taubman, has advised on two of the biggest Wall Street deals of the last year—Verizon Communications’ $130 billion purchase of the part of Verizon Wireless it didn’t already own from Vodafone and Comcast’s $45 billion merger with Time Warner Cable.

In the case of Moelis & Co., the IPO will help to make a bunch of investment bankers richer by making their holdings in the firm they are working for liquid. Moelis, Navid Mahmoodzadegan, and Jeffrey Raich are among the biggest shareholders of the firm, but their exact ownership was not listed in the securities filing.

Post Your Comment

Post Your Reply

Forbes writers have the ability to call out member comments they find particularly interesting. Called-out comments are highlighted across the Forbes network. You'll be notified if your comment is called out.